NEW YORK, July 25, 2006 (PRIMEZONE) -- The PricewaterhouseCoopers (PwC) 2006 Licensing Competitiveness Study reveals that companies with smaller licensing portfolios, consisting of 250 or fewer licensing agreements, are less likely to increase the size of their portfolios than those with 250 or more.
"Unlike the technology boom of the 1990s when small companies could grow organically by innovation and license their innovation, today there is a significant shift occurring," said David Marston, partner and U.S. Leader for Licensing Management, PricewaterhouseCoopers LLP. "Small companies continue to be the source of innovation but are now forced to either become a company worth acquiring or to face a steady decrease in licensing growth. Consequently, PwC research reveals venture capital spending is largely being directed to more mature start-up technology and software companies that have been created to support traditional players."
The study shows the following factors indicate the relationship between revenue, growth, and portfolio size is growing more complex:
-- Companies forecast faster growth for relatively larger IP
portfolios than for smaller IP portfolios - In 2005, U.S.
technology companies with fewer than 200 licensing agreements
in place were 32 percent less likely to forecast increased
licensing volume outside North America than technology
companies with more than 500 licensing agreements. Likewise,
the higher growth rate of small-company portfolios with more
than 250 agreements reflects the dominance and importance of
IP portfolios.
-- Companies with large licensing portfolios can monetize IP
most effectively - Companies with small licensing portfolios
often face delays and reductions in revenue streams. The number
of small companies with more than $1 million in total licensing
revenue was predicted to increase only 1 percent last year,
from 51 percent in 2004 to 52 percent in 2005.
-- Companies with small licensing portfolios struggled in 2005 to
keep pace with global licensing growth - Around the world,
small companies generally have more difficulty than larger
companies generating licensing revenue growth; they must
compete against larger, better-capitalized licensors. While
small U.S. companies with small licensing portfolios appear to
be making better headway in emerging markets, their
difficulties are likely to grow worldwide as larger companies
increase the size of their license portfolios.
Methodology
The PricewaterhouseCoopers' 2006 Licensing Competitiveness Study is based on data gathered through 151 telephone interviews with CFOs and CIOs at technology, biotechnology and entertainment and media (E&M) companies in the United States. The research was conducted from March 2005 through June 2005 by PricewaterhouseCoopers' International Survey Unit, and analysis was provided by PricewaterhouseCoopers' San Francisco-based Licensing Management practice.
About PricewaterhouseCoopers
PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 130,000 people in 148 countries work collaboratively using connected thinking to develop fresh perspectives and practical advice.
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